Tuesday, August 24, 2010

Mild profit taking sets in, KLCI holds on to 1,400

KUALA LUMPUR: Mild profit taking dragged the FBM KLCI slightly lower in early trade on Tuesday, Aug 24 after seven straight days of gains while sentiment was also dampened by the weak overnight close on Wall Street.

At 9.21am, the FBM KLCI fell 1.99 points to 1,401.16. Turnover was 96.7 million shares valued at RM88.88 million. There were 101 gainers, 116 losers and 158 stocks unchanged.

HLG Research said it was retaining its negative outlook on the Dow Jones Industrial Average owing to weakening technical momentum and slower economic data.

'For the Dow, the immediate resistance levels are 10458 (23.6% FR from 3M low of 9614 and 3M high of 10720), followed by 10720. Key support levels are 10167 (50% FR), the 10k psychological mark and 9875 (76.4% FR),' it said.

As for the FBM KLCI, it said the 30-stock index had, after rallying 54 points for seven consecutive trading days to close at a fresh 30-month high, the KLCI was officially in overbought territory.

'This is confirmed by the daily and weekly momentum oscillators, signaling profit-taking is imminent this week.'' Moreover, it has recorded eight consecutive days of 'white' candle and five consecutive days of trading above the Bollinger upper band,' it said.

'We expect immediate support at 1391 (5-day SMA), followed by the 1375 (10-day SMA) and next at 1367 (20-day SMA),' it said.

At Bursa Malaysia, PPB gave up part of its hefty gains, shedding 16 sen to RM17.20 while Tenaga also shed 16 sen to RM8.63. Telekom eased eight sen to RM3.50, Hong Leong Bank eased six sen to RM8.82 while MMC gave up five sen to RM2.51.

However, Lay Hong was the top gainer, up 34 sen to RM1.53 on The Edge FinancialDaily report that QL RESOURCES BHD [] had on Monday acquired 11 million shares or 23.29% of poultry-based LAY HONG BHD [] in an off-market transaction.

Plenitude climbed 10 sen to RM3.68 on strong earnings. Proton added nine sen to RM4.75'' on its strong earnings.

Hwang DBS Vickers Research has raised its target price for Proton to RM6.60, after upgrading valuation multiple to 0.7x CY11F NTA (vs. 0.5x previously).

Axiata, which is scheduled to announce its results on Tuesday, rose seven sen to RM4.45.


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